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Lakeland Bancorp Announces First Quarter Results and Increases Cash Dividend 9%

OAK RIDGE, N.J., April 29, 2019 (GLOBE NEWSWIRE) -- Lakeland Bancorp, Inc. (NASDAQ: LBAI) (the “Company”), the parent company of Lakeland Bank (“Lakeland”), reported net income of $15.6 million and earnings per diluted share ("EPS") of $0.31 for the three months ended March 31, 2019 versus net income of $15.3 million and EPS of $0.32 for the prior year quarter. Excluding merger-related expenses pertaining to the Company’s January 2019 acquisition of Highlands Bancorp, Inc. ("Highlands") of $2.1 million, tax-effected, net income for the first quarter of 2019 was $17.8 million, or $0.35 per diluted share.

For the first quarter of 2019, annualized return on average assets was 1.02%, annualized return on average common equity was 9.41% and annualized return on average tangible common equity was 12.32%. Excluding merger-related expenses these ratios were 1.17%, 10.71% and 14.01%, respectively.

The acquisition of Highlands, completed on January 4, 2019, added $496.9 million in total assets, $428.1 million in total loans and $409.6 million in total deposits. Goodwill totaled $17.7 million and core deposit intangibles were $3.7 million. The Company’s financial statements reflect the impact of the merger from the date of acquisition, which should be considered when comparing periods.

Thomas Shara, Lakeland Bancorp’s President and CEO commented, "We’re excited to complete the Highlands Bancorp acquisition this quarter and welcome the Highlands customers and shareholders to the Lakeland family. Another highlight is our successful completion the Highlands core conversion to our systems and additional services their customers will benefit from as part of a larger institution. Lakeland continues to carefully grow our assets in a very competitive environment and as a sign of continued confidence, our Board increased the annual cash dividend from $0.46 to $0.50 per share."

Net Interest Margin and Income

Net interest margin for the first quarter of 2019 of 3.42% increased three basis points from the first quarter of 2018 and 13 basis points from the fourth quarter of 2018. The increase in net interest margin from the prior quarter was due to the continued increase in loan portfolio yield as a result of the origination of higher yielding loans and $1.0 million of accretion income on Highlands' loans and deposits.

The yield on interest-earning assets for the first quarter of 2019 was 4.44% compared to 4.02% for the first quarter of 2018 and 4.20% for the fourth quarter of 2018. The increase in yield from the prior quarter was a result of originating higher yielding loans, $787,000 in accretion income on loans and higher investment securities yields.

The cost of interest-bearing liabilities for the first quarter of 2019 was 1.34% compared to 0.83% for the first quarter of 2018 and 1.21% for the fourth quarter of 2018. The cost of interest-bearing transaction accounts, time deposits and borrowings have increased since the first quarter of 2018 largely driven by competitive pressures and higher market interest rates.

Net interest income increased to $48.6 million for the first quarter of 2019 compared to $42.2 million for the first quarter of 2018, due primarily to the growth of interest-earning assets and increases in loan yields, partially offset by an increase in interest-bearing liabilities and higher interest rates on deposits and borrowings.

Noninterest Income

Noninterest income increased $389,000 to $5.7 million for the first quarter of 2019 from $5.3 million for the first quarter of 2018. The Company recorded a $353,000 gain on equity securities in the first quarter of 2019 compared to a loss of $18,000 during the same period in 2018. In addition, commissions and fees increased $140,000 compared to the first quarter of 2018 due primarily to an increase in investment services income, while gains on sales of loans increased $125,000. Other income decreased $173,000 due primarily to a decrease in loan swap income.

Noninterest Expense

Noninterest expense totaled $34.0 million for the first quarter of 2019 compared to $27.1 million for the first quarter of 2018. Excluding $2.9 million in pre-tax merger related expenses, noninterest expense increased $4.0 million primarily due to salary and employee benefit expense increasing $2.4 million as a result of additions to our staff from the Highlands merger, normal merit increases and higher benefit costs. In the first quarter of 2019, data processing expense increased $861,000 compared to the first quarter of 2018 due primarily to the Company’s expansion and improvement of its digital infrastructure. Net occupancy expense and core deposit intangible amortization increased $216,000 and $147,000, respectively, due primarily to the Highlands merger.

Income Tax Expense

The effective tax rate for the first quarter of 2019 was 21.2% compared to 20.3% for the same period last year.

Financial Condition

At March 31, 2019, total assets were $6.37 billion, an increase of $559.0 million, including $496.9 million from Highlands compared to December 31, 2018. Total loans grew $464.2 million, including $428.1 million from Highlands, to $4.92 billion and investment securities increased $29.2 million, including $24.5 million from Highlands, to $850.7 million. On the funding side, total deposits increased $443.9 million, including $409.6 million from Highlands, to $5.06 billion, while borrowings increased $35.2 million, including $41.0 million from Highlands to $555.2 million. At March 31, 2019, total loans as a percent of total deposits was 97.2%.

Asset Quality

At March 31, 2019, non-performing assets totaled $16.4 million, 0.26% of total assets, compared to $13.0 million, 0.22% of total assets, at December 31, 2018. Non-accrual loans as a percent of total loans equaled 0.32% at March 31, 2019 compared to 0.27% at December 31, 2018. The allowance for loan losses increased to $38.0 million, 0.77% of total loans, at March 31, 2019, compared to $37.7 million, 0.84% of total loans, at December 31, 2018. The Company's allowance for loan losses excluding acquired loans would be 0.91%. In the first quarter of 2019, the Company had net charge-offs of $217,000, 0.02% of average loans, annualized, compared to net charge-offs of $1.1 million, 0.10% of average loans, annualized, for the same period in 2018. The first quarter of 2019 provision for loan losses was $508,000 compared to $1.3 million in the first quarter of 2018.

Capital

At March 31, 2019, stockholders' equity was $681.3 million compared to $623.7 million at December 31, 2018, a 9% increase. Lakeland Bank remains above FDIC “well capitalized” standards, with a Tier 1 Leverage Ratio of 9.23% at March 31, 2019. The book value per common share and tangible book value per common share increased 9.0% and 9.2% to $13.51 and $10.35, respectively, compared to $12.40 and $9.48 at March 31, 2018. On April 25, 2019, the Company increased the quarterly cash dividend by $0.01 per share, or 9% to $0.125 per share to be paid on May 17, 2019 to shareholders of record as of May 9, 2019.

Forward-Looking Statements

The information disclosed in this document includes various forward-looking statements that are made in reliance upon the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The words “anticipates”, “projects”, “intends”, “estimates”, “expects”, “believes”, “plans”, “may”, “will”, “should”, “could”, and other similar expressions are intended to identify such forward-looking statements. The Company cautions that these forward-looking statements are necessarily speculative and speak only as of the date made, and are subject to numerous assumptions, risks and uncertainties, all of which may change over time. Actual results could differ materially from such forward-looking statements. The following factors, among others, could cause actual results to differ materially and adversely from such forward-looking statements: changes in the financial services industry and the U.S. and global capital markets, changes in economic conditions nationally, regionally and in the Company’s markets, the nature and timing of actions of the Federal Reserve Board and other regulators, the nature and timing of legislation and regulation affecting the financial services industry, government intervention in the U.S. financial system, changes in federal and state tax laws, changes in levels of market interest rates, pricing pressures on loan and deposit products, credit risks of the Company’s lending and leasing activities, successful implementation, deployment and upgrades of new and existing technology, systems, services and products, customers’ acceptance of the Company’s products and services, competition and failure to realize anticipated efficiencies and synergies from the merger of Highlands Bancorp, Inc. into Lakeland Bancorp and the merger of Highlands State Bank into Lakeland Bank. Any statements made by the Company that are not historical facts (including statements regarding anticipated synergies from the Highlands Bancorp and Highlands State Bank mergers and regarding positioning for 2019) should be considered to be forward-looking statements. The Company is not obligated to update and does not undertake to update any of its forward-looking statements made herein.

Explanation of Non-GAAP Financial Measures

Reported amounts are presented in accordance with accounting principles generally accepted in the United States of America ("GAAP"). This press release also contains certain supplemental non-GAAP information that the Company’s management uses in its analysis of the Company’s financial results. Specifically, the Company provides measures based on what it believes are its operating earnings on a consistent basis, and excludes material non-routine operating items which affect the GAAP reporting of results of operations. The Company’s management believes that providing this information to analysts and investors allows them to better understand and evaluate the Company’s core financial results for the periods in question.

The Company also provides measurements and ratios based on tangible equity and tangible assets. These measures are utilized by regulators and market analysts to evaluate a company’s financial condition and, therefore, the Company’s management believes that such information is useful to investors.

The Company also uses an efficiency ratio that is a non-GAAP financial measure. The ratio that the Company uses excludes amortization of core deposit intangibles, provision for unfunded lending commitments and, where applicable, long-term debt prepayment fees and merger related expenses. Income for the non-GAAP ratio is increased by the favorable effect of tax-exempt income and excludes gains and losses from the sale of investment securities and gain on debt extinguishment, which can vary from period to period. The Company uses this ratio because it believes the ratio provides a relevant measure to compare the operating performance period to period.

These disclosures should not be viewed as a substitute for financial results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures which may be presented by other companies. See accompanying non-GAAP tables.

About Lakeland

Lakeland Bancorp, Inc. (LBAI) has approximately $6.37 billion in total assets. Lakeland Bank, a wholly-owned subsidiary of Lakeland Bancorp, Inc., operates 53 branch offices throughout Bergen, Essex, Morris, Ocean, Passaic, Somerset, Sussex, and Union counties in New Jersey including one branch in Highland Mills, New York; five New Jersey regional commercial lending centers in Bernardsville, Jackson, Montville, Teaneck and Waldwick; and one New York commercial lending center to serve the Hudson Valley region. Lakeland also has a commercial loan production office serving Middlesex and Monmouth counties in New Jersey. Lakeland Bank offers an extensive suite of financial products and services for businesses and consumers. Visit LakelandBank.com for more information.

Thomas J. Shara
President & CEO

Thomas F. Splaine
EVP & CFO
973-697-2000


Lakeland Bancorp, Inc.

Consolidated Statements of Income

(Unaudited)

Three Months Ended
March 31,

(Dollars in thousands, except per share amounts)

2019

2018

INTEREST INCOME

Loans and net deferred fees and costs

$

57,642

$

45,544

Federal funds sold and interest-bearing deposits with banks

254

166

Taxable investment securities and other

4,873

3,992

Tax exempt investment securities

408

443

TOTAL INTEREST INCOME

63,177

50,145

INTEREST EXPENSE

Deposits

11,497

5,755

Federal funds purchased and securities sold under agreements to repurchase

608

134

Other borrowings

2,466

2,020

TOTAL INTEREST EXPENSE

14,571

7,909

NET INTEREST INCOME

48,606

42,236

Provision for loan losses

508

1,284

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES

48,098

40,952

NONINTEREST INCOME

Service charges on deposit accounts

2,573

2,611

Commissions and fees

1,412

1,272

Income on bank owned life insurance

683

719

Gain (loss) on equity securities

353

(18

)

Gains on sales of loans

371

246

Other income

331

504

TOTAL NONINTEREST INCOME

5,723

5,334

NONINTEREST EXPENSE

Salaries and employee benefit expense

19,231

16,861

Net occupancy expense

2,954

2,738

Furniture and equipment expense

2,116

2,206

FDIC insurance expense

450

425

Stationary, supplies and postage expense

447

416

Marketing expense

469

361

Data processing expense

1,327

466

Telecommunications expense

493

421

ATM and debit card expense

602

510

Core deposit intangible amortization

304

157

Other real estate owned and other repossessed assets expense

86

46

Merger related expenses

2,860

Other expenses

2,645

2,530

TOTAL NONINTEREST EXPENSE

33,984

27,137

INCOME BEFORE PROVISION FOR INCOME TAXES

19,837

19,149

Provision for income taxes

4,211

3,894

NET INCOME

$

15,626

$

15,255

EARNINGS PER COMMON SHARE:

Basic

$

0.31

$

0.32

Diluted

$

0.31

$

0.32

DIVIDENDS PAID PER COMMON SHARE

$

0.115

$

0.100


Lakeland Bancorp, Inc.

Consolidated Balance Sheets

(Dollars in thousands)

March 31, 2019

December 31, 2018

(Unaudited)

ASSETS

Cash

$

205,322

$

205,199

Interest-bearing deposits due from banks

21,037

3,400

Total cash and cash equivalents

226,359

208,599

Investment securities available for sale, at fair value

659,238

638,618

Equity securities, at fair value

15,232

15,921

Investment securities held to maturity; fair value of $158,219 at March 31,
2019 and $150,932 at December 31, 2018

159,308

153,646

Federal Home Loan Bank and other membership stocks, at cost

16,951

13,301

Loans held for sale

600

1,113

Loans, net of deferred fees

4,921,391

4,456,733

Allowance for loan losses

(37,979

)

(37,688

)

Net loans

4,883,412

4,419,045

Premises and equipment, net

51,703

49,175

Operating lease right-of-use assets

19,239

Accrued interest receivable

17,515

16,114

Goodwill

154,153

136,433

Other identifiable intangible assets

5,192

1,768

Bank owned life insurance

110,430

110,052

Other assets

45,731

42,308

TOTAL ASSETS

$

6,365,063

$

5,806,093

LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES

Deposits:

Noninterest-bearing

$

1,071,890

$

950,218

Savings and interest-bearing transaction accounts

3,046,322

2,913,414

Time deposits $250 thousand and under

736,957

589,737

Time deposits over $250 thousand

209,415

167,301

Total deposits

5,064,584

4,620,670

Federal funds purchased and securities sold under agreements to repurchase

261,266

233,905

Other borrowings

175,783

181,118

Subordinated debentures

118,193

105,027

Operating lease liabilities

20,823

Other liabilities

43,071

41,634

TOTAL LIABILITIES

5,683,720

5,182,354

STOCKHOLDERS' EQUITY

Common stock, no par value; authorized 100,000,000 shares at March 31,
2019 and at December 31, 2018; issued shares 50,435,663 at
March 31, 2019 and 47,486,250 shares at December 31, 2018

558,245

514,703

Retained earnings

126,787

116,874

Accumulated other comprehensive loss

(3,689

)

(7,838

)

TOTAL STOCKHOLDERS' EQUITY

681,343

623,739

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

6,365,063

$

5,806,093


Lakeland Bancorp, Inc.

Financial Highlights

(Unaudited)

For the Quarter Ended

March 31,

Dec 31,

Sept 30,

June 30,

March 31,

(Dollars in thousands, except per share data)

2019

2018

2018

2018

2018

INCOME STATEMENT

Net interest income

$

48,606

$

44,206

$

43,624

$

43,493

$

42,236

Provision for loan losses

(508

)

(591

)

(1,046

)

(1,492

)

(1,284

)

Gains on sales of loans

371

299

484

300

246

Gain (loss) on equity securities

353

(199

)

(439

)

73

(18

)

Other noninterest income

4,999

5,528

5,594

5,336

5,106

Merger related expenses

(2,860

)

(464

)

Other noninterest expense

(31,124

)

(28,199

)

(27,793

)

(27,574

)

(27,137

)

Pretax income

19,837

20,580

20,424

20,136

19,149

Provision for income taxes

(4,211

)

(5,030

)

(3,666

)

(4,298

)

(3,894

)

Net income

$

15,626

$

15,550

$

16,758

$

15,838

$

15,255

Basic earnings per common share

$

0.31

$

0.32

$

0.35

$

0.33

$

0.32

Diluted earnings per common share

$

0.31

$

0.32

$

0.35

$

0.33

$

0.32

Dividends paid per common share

$

0.115

$

0.115

$

0.115

$

0.115

$

0.100

Dividends paid

$

5,838

$

5,510

$

5,510

$

5,509

$

4,778

Weighted average shares - basic

50,275

47,605

47,605

47,600

47,503

Weighted average shares - diluted

50,442

47,780

47,788

47,770

47,736

SELECTED OPERATING RATIOS

Annualized return on average assets

1.02

%

1.08

%

1.19

%

1.17

%

1.14

%

Annualized return on average common equity

9.41

%

10.05

%

11.02

%

10.71

%

10.60

%

Annualized return on average tangible common equity (1)

12.32

%

12.98

%

14.31

%

13.97

%

13.90

%

Annualized net interest margin

3.42

%

3.29

%

3.32

%

3.43

%

3.39

%

Efficiency ratio (1)

56.62

%

56.18

%

56.00

%

55.60

%

56.58

%

Common stockholders' equity to total assets

10.70

%

10.74

%

10.80

%

10.80

%

10.75

%

Tangible common equity to tangible assets (1)

8.41

%

8.57

%

8.55

%

8.51

%

8.43

%

Tier 1 risk-based ratio

10.98

%

11.26

%

11.21

%

11.16

%

11.08

%

Total risk-based ratio

13.48

%

13.71

%

13.69

%

13.67

%

13.61

%

Tier 1 leverage ratio

9.23

%

9.39

%

9.42

%

9.43

%

9.28

%

Common equity tier 1 capital ratio

10.38

%

10.62

%

10.56

%

10.49

%

10.40

%

Book value per common share

$

13.51

$

13.14

$

12.79

$

12.59

$

12.40

Tangible book value per common share (1)

$

10.35

$

10.22

$

9.88

$

9.67

$

9.48

(1) See Supplemental Information - Non-GAAP Financial Measures


Lakeland Bancorp, Inc.

Financial Highlights

(Unaudited)

For the Quarter Ended

March 31,

Dec 31,

Sept 30,

June 30,

March 31,

(Dollars in thousands)

2019

2018

2018

2018

2018

SELECTED BALANCE SHEET DATA AT PERIOD-END

Loans

$

4,924,671

$

4,460,447

$

4,332,238

$

4,281,302

$

4,228,052

Allowance for loan losses

37,979

37,688

37,293

36,604

35,644

Investment securities

850,729

821,486

801,315

798,096

805,654

Total assets

6,365,063

5,806,093

5,627,057

5,534,488

5,477,829

Total deposits

5,064,584

4,620,670

4,642,443

4,400,019

4,447,965

Short-term borrowings

261,266

233,905

47,398

197,870

126,485

Other borrowings

293,976

286,145

289,635

301,339

281,906

Stockholders' equity

681,343

623,739

607,555

597,864

588,648

LOANS

Commercial, real estate

$

3,769,545

$

3,377,324

$

3,281,946

$

3,222,461

$

3,169,375

Commercial, industrial and other

389,230

336,735

334,241

339,974

339,665

Equipment financing

90,791

87,925

82,881

82,006

78,238

Residential mortgages

335,290

329,854

315,135

321,717

323,054

Consumer and home equity

339,815

328,609

318,035

315,144

317,720

Total loans

$

4,924,671

$

4,460,447

$

4,332,238

$

4,281,302

$

4,228,052

DEPOSITS

Noninterest-bearing

$

1,071,890

$

950,218

$

996,296

$

967,911

$

974,641

Savings and interest-bearing transaction accounts

3,046,322

2,913,414

2,855,318

2,625,325

2,682,726

Time deposits

946,372

757,038

790,829

806,783

790,598

Total deposits

$

5,064,584

$

4,620,670

$

4,642,443

$

4,400,019

$

4,447,965

Total loans to total deposits ratio

97.2

%

96.5

%

93.3

%

97.3

%

95.1

%

SELECTED AVERAGE BALANCE SHEET DATA

Loans

$

4,871,534

$

4,393,382

$

4,296,244

$

4,247,443

$

4,194,207

Investment securities

858,046

823,193

811,217

811,361

821,055

Interest-earning assets

5,772,853

5,346,934

5,221,612

5,094,048

5,062,628

Total assets

6,183,224

5,694,827

5,570,286

5,437,540

5,409,409

Noninterest-bearing demand deposits

1,056,060

1,003,508

999,217

969,965

964,498

Savings deposits

513,270

483,606

491,095

496,630

487,666

Interest-bearing transaction accounts

2,554,865

2,446,325

2,319,863

2,195,553

2,240,044

Time deposits

890,070

769,129

789,691

792,270

761,418

Total deposits

5,014,265

4,702,568

4,599,866

4,454,418

4,453,626

Short-term borrowings

128,972

50,196

36,702

73,305

55,137

Other borrowings

306,529

288,126

291,477

283,206

283,645

Total interest-bearing liabilities

4,393,706

4,037,382

3,928,828

3,840,964

3,827,910

Stockholders' equity

673,205

613,583

603,059

593,388

583,700


Lakeland Bancorp, Inc.

Financial Highlights

(Unaudited)

For the Quarter Ended

March 31,

Dec 31,

Sept 30,

June 30,

March 31,

(Dollars in thousands)

2019

2018

2018

2018

2018

AVERAGE ANNUALIZED YIELDS (TAXABLE EQUIVALENT BASIS)

ASSETS

Loans

4.80

%

4.58

%

4.54

%

4.50

%

4.40

%

Taxable investment securities and other

2.49

%

2.44

%

2.26

%

2.21

%

2.17

%

Tax-exempt securities

2.74

%

2.74

%

2.71

%

2.66

%

2.65

%

Federal funds sold and interest-bearing cash accounts

2.35

%

2.19

%

1.87

%

1.65

%

1.40

%

Total interest-earning assets

4.44

%

4.20

%

4.14

%

4.12

%

4.02

%

LIABILITIES

Savings accounts

0.07

%

0.06

%

0.06

%

0.06

%

0.06

%

Interest-bearing transaction accounts

1.18

%

1.04

%

0.89

%

0.69

%

0.61

%

Time deposits

1.79

%

1.79

%

1.61

%

1.34

%

1.23

%

Borrowings

2.82

%

2.65

%

2.66

%

2.51

%

2.54

%

Total interest-bearing liabilities

1.34

%

1.21

%

1.08

%

0.91

%

0.83

%

Net interest spread (taxable equivalent basis)

3.10

%

2.99

%

3.06

%

3.21

%

3.19

%

Annualized net interest margin (taxable equivalent basis)

3.42

%

3.29

%

3.32

%

3.43

%

3.39

%

Annualized cost of deposits

0.93

%

0.84

%

0.73

%

0.59

%

0.52

%

ASSET QUALITY DATA

ALLOWANCE FOR LOAN LOSSES

Balance at beginning of period

$

37,688

$

37,293

$

36,604

$

35,644

$

35,455

Provision for loan losses

508

591

1,046

1,492

1,284

Charge-offs

(516

)

(381

)

(753

)

(963

)

(1,250

)

Recoveries

299

185

396

431

155

Balance at end of period

$

37,979

$

37,688

$

37,293

$

36,604

$

35,644

NET LOAN CHARGE-OFFS (RECOVERIES)

Commercial, real estate

$

67

$

132

$

(115

)

$

181

$

(13

)

Commercial, industrial and other

50

(44

)

(26

)

213

992

Equipment financing

85

28

366

69

21

Residential mortgages

41

(2

)

36

(3

)

79

Consumer and home equity

(26

)

82

96

72

16

Net charge-offs

$

217

$

196

$

357

$

532

$

1,095

NON-PERFORMING ASSETS

Commercial, real estate

$

9,817

$

7,192

$

5,737

$

7,353

$

6,204

Commercial, industrial and other

2,202

1,019

1,189

1,171

1,505

Equipment financing

383

501

441

834

250

Residential mortgages

1,740

1,986

2,347

2,992

3,045

Consumer and home equity

1,581

1,432

1,410

1,917

2,341

Total non-accrual loans

15,723

12,130

11,124

14,267

13,345

Property acquired through foreclosure or repossession

715

830

2,754

2,184

1,392

Total non-performing assets

$

16,438

$

12,960

$

13,878

$

16,451

$

14,737

Loans past due 90 days or more and still accruing

$

78

$

$

16

$

$

1

Loans restructured and still accruing

$

6,352

$

9,293

$

9,030

$

7,926

$

9,526

Ratio of allowance for loan losses to total loans

0.77

%

0.84

%

0.86

%

0.85

%

0.84

%

Total non-accrual loans to total loans

0.32

%

0.27

%

0.26

%

0.33

%

0.32

%

Total non-performing assets to total assets

0.26

%

0.22

%

0.25

%

0.30

%

0.27

%

Annualized net charge-offs (recoveries) to average loans

0.02

%

0.02

%

0.03

%

0.05

%

0.10

%


Lakeland Bancorp, Inc.

Supplemental Information - Non-GAAP Financial Measures

(Unaudited)

At or for the Quarter Ended

March 31,

Dec 31,

Sept 30,

June 30,

March 31,

(Dollars in thousands, except per share amounts)

2019

2018

2018

2018

2018

CALCULATION OF TANGIBLE BOOK VALUE PER COMMON SHARE

Total common stockholders' equity at end of period - GAAP

$

681,343

$

623,739

$

607,555

$

597,864

$

588,648

Less: Goodwill

154,153

136,433

136,433

136,433

136,433

Less: Other identifiable intangible assets

5,192

1,768

1,910

2,052

2,205

Total tangible common stockholders' equity at end of period - Non-GAAP

$

521,998

$

485,538

$

469,212

$

459,379

$

450,010

Shares outstanding at end of period

50,436

47,486

47,485

47,484

47,476

Book value per share - GAAP

$

13.51

$

13.14

$

12.79

$

12.59

$

12.40

Tangible book value per share - Non-GAAP

$

10.35

$

10.22

$

9.88

$

9.67

$

9.48

CALCULATION OF TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS

Total tangible common stockholders' equity at end of period - Non-GAAP

$

521,998

$

485,538

$

469,212

$

459,379

$

450,010

Total assets at end of period - GAAP

$

6,365,063

$

5,806,093

$

5,627,057

$

5,534,488

$

5,477,829

Less: Goodwill

154,153

136,433

136,433

136,433

136,433

Less: Other identifiable intangible assets

5,192

1,768

1,910

2,052

2,205

Total tangible assets at end of period - Non-GAAP

$

6,205,718

$

5,667,892

$

5,488,714

$

5,396,003

$

5,339,191

Common equity to assets - GAAP

10.70

%

10.74

%

10.80

%

10.80

%

10.75

%

Tangible common equity to tangible assets - Non-GAAP

8.41

%

8.57

%

8.55

%

8.51

%

8.43

%

CALCULATION OF RETURN ON AVERAGE TANGIBLE COMMON EQUITY

Net income - GAAP

$

15,626

$

15,550

$

16,758

$

15,838

$

15,255

Total average common stockholders' equity - GAAP

$

673,205

$

613,583

$

603,059

$

593,388

$

583,700

Less: Average goodwill

153,562

136,433

136,433

136,433

136,433

Less: Average other identifiable intangible assets

5,254

1,844

1,982

2,134

2,300

Total average tangible common stockholders' equity - Non-GAAP

$

514,389

$

475,306

$

464,644

$

454,821

$

444,967

Return on average common stockholders' equity - GAAP

9.41

%

10.05

%

11.02

%

10.71

%

10.60

%

Return on average tangible common stockholders' equity - Non-GAAP

12.32

%

12.98

%

14.31

%

13.97

%

13.90

%

CALCULATION OF EFFICIENCY RATIO

Total noninterest expense

$

33,984

$

28,663

$

27,793

$

27,574

$

27,137

Amortization of core deposit intangibles

(304

)

(142

)

(142

)

(153

)

(157

)

Merger related expenses

(2,860

)

(464

)

Noninterest expense, as adjusted

$

30,820

$

28,057

$

27,651

$

27,421

$

26,980

Net interest income

$

48,606

$

44,206

$

43,624

$

43,493

$

42,236

Total noninterest income

5,723

5,628

5,639

5,709

5,334

Total revenue

54,329

49,834

49,263

49,202

47,570

Tax-equivalent adjustment on municipal securities

108

109

113

114

118

Total revenue, as adjusted

$

54,437

$

49,943

$

49,376

$

49,316

$

47,688

Efficiency ratio - Non-GAAP

56.62

%

56.18

%

56.00

%

55.60

%

56.58

%


Lakeland Bancorp, Inc.

Supplemental Information - Reconciliation of Net Income

(Unaudited)

For the Quarter Ended

March 31,

March 31,

(Dollars in thousands, except per share amounts)

2019

2018

Net income - GAAP

$

15,626

$

15,255

NON-ROUTINE TRANSACTIONS, NET OF TAX

Tax deductible merger related expenses

1,656

Non-tax deductible merger related expenses

491

Net effect of non-routine transactions

2,147

Net income available to common shareholders excluding non-routine transactions

$

17,773

$

15,255

Less: Earnings allocated to participating securities

(141

)

(141

)

Net Income, excluding non-routine transactions

$

17,632

$

15,114

Weighted average shares - Basic

50,275

$

47,503

Weighted average shares - Diluted

50,442

$

47,736

Basic earnings per share - GAAP

$

0.31

$

0.32

Diluted earnings per share - GAAP

$

0.31

$

0.32

Basic earnings per share, adjusted for non-routine transactions

$

0.35

$

0.32

Diluted earnings per share, adjusted for non-routine transactions (Core EPS)

$

0.35

$

0.32

Return on average assets - GAAP

1.02

%

1.14

%

Return on average assets, adjusted for non-routine transactions

1.17

%

1.14

%

Return on average common stockholders' equity - GAAP

9.41

%

10.60

%

Return on average common stockholders' equity, adjusted for non-routine transactions

10.71

%

10.60

%

Return on average tangible common stockholders' equity - Non-GAAP

12.32

%

13.90

%

Return on average tangible common stockholders' equity - Non-GAAP, adjusted for
non-routine transactions

14.01

%

13.90

%